Navigating the Toughest Day of the Week
What’s up everyone, Ross Cameron here! Today was a stark reminder that not every day can be your best day, especially in the volatile world of day trading. It was Friday, typically a day many look forward to, but for traders, it can often present unexpected challenges and opportunities. Let’s dive into the events that unfolded and the key takeaways from today’s trading session.
The Predicament of Leading Gappers
Early mornings are crucial for day traders as we gear up by scoping out the leading gappers. Today’s focus was on RWOD and ZCMD, both surging by 50%.
RWOD caught my eye initially, showing a promising pre-market surge from $7 all the way up to $30. However, this joy was short-lived as it displayed a classic head and shoulders pattern, eventually giving back its gains. Originating as a special acquisition company (SPAC), RWOD spiked due to news of a merger which acted as a catalyst. Despite the dramatic movement, the unreliability was evident, leading me to steer clear of trading it.
Next on my screen was ZCMD, another stock that had leaped overnight. Though its after-hours performance suggested potential, the morning told a different story. The stock struggled to revisit its after-hour highs, bogged down by its heavily traded nature. This lack of momentum and clear resistance points led me to decide against trading ZCMD as well.
Encounters with Other Gappers
As the morning progressed, a few other stocks appeared on my radar, yet none seemed compelling enough to engage with.
NVFY piqued interest momentarily when it appeared to punch higher at market open. However, the absence of a solid catalyst and the minuscule trading volume made it clear that this wasn’t a move I could trust. The risk was too high compared to the potential reward.
MRT, showing no news or credible catalysts, and lingering near the 200-day moving average, was an easy no. On the other hand, WISA, which I had traded successfully earlier in the week, was tempting. It was making slight upward moves but lacked fresh catalysts and showed significantly lower relative volumes compared to previous days. Despite the temptation, my disciplined approach reminded me that engaging without a clear advantage was against my better judgment.
Recent Learnings and Strategy Adjustments
Day trading is as much about strategy and knowledge as it is about mindset and discipline. In my recent YouTube episodes on Short Selling and Tax-Free Trading, I delved into tactics that both novice and seasoned traders would find beneficial. These learnings constantly shape my trading decisions and strategies.
The Art of Discipline and Risk Management
One of the most crucial skills in trading is not just knowing when to trade, but also when not to. Today’s scenario was a perfect exercise in discipline. Reflecting on my March drawdown, the priority was clear: avoid unnecessary risks, especially when market signals are mixed or unclear. This approach is vital in protecting gains and limiting losses.
Fridays are particularly tricky. They can either set the tone for a relaxing weekend or leave you ruminating over what went wrong. Today was a testament to the importance of cautious trading. Companies tend to release bad news on Fridays, hoping it gets forgotten by Monday, which adds an extra layer of unpredictability.
Concluding a No-Trade Day
As the market hours progressed, none of the stocks provided the confidence I needed to make a move. Acknowledging this saved me from potential losses, reinforcing that sometimes, the best move is to make no move at all. My decision to lock up and focus on the upcoming trading days was a strategic choice to ensure mental readiness and capital preservation.
Today wasn’t just about the trades I didn’t make, but about reinforcing the discipline that will help me continue to succeed in the volatile world of day trading. Remember, every trader’s journey is fraught with ups and downs—it’s how we navigate these that truly shape our path. Thanks for reading, and happy trading!
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Warrior Trading was founded by Ross Cameron in 2012, and is now a thriving community of thousands of traders. You can learn more about joining the Warrior Trading community here.
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